Financing Maternal Health Services: An overview of approaches Laurel Hatt, PhD Health Systems 20/20 Abt Associates Inc. September 9, 2010 Global Health Council

Outline Why does maternal health financing matter? Key approaches and case studies Big picture conclusions

Why does health financing matter for maternal health? Raising money for eclampsia care in Burkina Faso: “My father asked for part of it at the mosque, and my mother also asked for some and then we added our 5,000 F [savings]... my mother got 1,000 F from one person and 1,000 from another, 1,500 from yet another. We had a bit of maize that we sold. I had three cloths and I sold these and added it all up and had 15,000 F, which we went to give [to the hospital].” Storeng K, Baggaley R, Ganaba R, Ouattara F, Akoum M, Filippi V. (2008). Paying the price: The cost and consequences of emergency obstetric care in Burkina Faso. Social Science & Medicine 66: 545-557.

Why does health financing matter for maternal health? Access to safe motherhood services Barriers – “3 delays” Desire to avoid costs  delayed decision to seek care Finding money for transport  delayed arrival to facility Raising money to pay for hospital care  delayed admission to hospital Home births have no transportation costs, lower time costs, fewer fees for care providers, no unofficial payments, and are potentially less burdensome to the family than facility-based births. How can we change the incentives?

Why does health financing matter for maternal health? Financial protection Catastrophic expenditures Maternal care can be very expensive, especially if there are complications Raising money for care can create future risks (going into debt, selling assets, cutting spending on essentials) Impoverishment – costs can force a family into poverty Economic, social, health consequences for the family Normal delivery: Direct costs range from 1-5% of annual household expenditures Doesn’t include transport, time costs, hotel, food Complicated delivery: 5-34% of household expenditures What makes up those costs? Transportation (can be up to 50% of total) Service delivery (room charge, provider fees, drugs, supplies, lab tests, food) Drugs can be 35-55% of service charges Informal or under-the-table payments Opportunity costs of time lost – for the woman, for her caregivers

So what are the options? Fee exemptions Insurance For deliveries For C-sections Insurance Community-based health insurance National/social health insurance Demand-side financing Vouchers Conditional cash transfers

User fee exemptions

User fee exemptions User fees can be a significant barrier to access, especially for the poor Demand for delivery care goes down after fees added User fees hurt the poor more But user fees can represent a substantial proportion of health financing at the facility level (15-40%) May be especially important for covering recurrent costs – supplies, drugs – and avoiding stock-outs Provide “top-ups” to underpaid staff Poor: represent a larger portion of their income Demand for normal delivery care goes down most

User fee exemptions: Ghana User fees for deliveries were abolished over 2003-2005 Results: Higher skilled attendance rates Increases greatest among poorer quintiles, less educated women Lower out-of-pocket (OOP) payments Rich benefit more than poor in proportionate terms Decrease in incidence of catastrophic payments Especially for C-sections Especially among the poorest HIPC Debt relief funds were channeled to districts to reimburse public and private facilities 12% -- Central 5% -- Volta – more rural area Catastrophic expenditures: Delivery expenditures >2.5% of income (decrease of 22% [richest] vs. 13% [poorest])

User fee exemptions: Ghana Source: Witter et al. (2009), Providing free maternal care: Ten lessons from an evaluation of the national delivery exemption policy in Ghana. Global Health Action.

User fee exemptions: Ghana Challenges: Quality of care problems Some decreases in quality of care measured; overall facility quality is very low Funding shortages Government did not obtain debt relief funds in 2005 Severe under-funding as exemptions were extended beyond pilot regions Fees were reinstated in many areas Facilities built up debt waiting for reimbursement for care already provided QOC assessment scores significantly decreased in Volta region – quality either unchanged or decreased Morestin F & Ridde V (2009). The abolition of user fees for health services in Africa Lessons from the literature. Université de Montréal. http://www.help-ev.de/fileadmin/media/pdf/Downloads/Polic_Papers/Brief_Abolition_english.pdf “In Ghana, for as long as the compensatory funds were available, administrators of health facilities were relieved to no longer have to pursue women unable to pay for their deliveries. However, as the compensatory funds became inadequate, health facilities became indebted to their suppliers, to the point where some had to reinstate payment from women for deliveries.”

Fee exemptions for C-sections: Mali Free C-section policy announced July 2005 Normal deliveries still have charges (up to $14) Facilities compensated for lost revenue Kits with drugs, supplies and other consumables for C-sections Reimbursed on actual costs of hospital stay: Up to $60 for each case Very low C-section rate in Mali: 1.6% (DHS 2006) MMR between 400 and 600 Under 5% indicates low access to obstetric care to reduce maternal mortality Under 2% indicates extremely low access Included cost of surgery, drugs, lab tests, and hospitalization; excluded transport, except to referral facility)

Mali: Clear increase in C-section rates over time Source: Health Systems 20/20, Abt Associates 13

Fee exemptions for C-sections: Mali Use of C-sections more than doubled, 2005-2009 But 2.33% rate is still very low No evidence of increase in unnecessary C-sections Clear possibility of perverse incentives Challenges: Financial and quality barriers to facility-based normal delivery care remain Transport barriers from villages to first-level facilities Poor communications and referrals systems between first and higher-level facilities Optimal rate: 5% to 15% (AMDD Working Group on Indicators 2004) Rates still less than 1% in several regions Preliminary results indicate that the “free caesarean” policy is supported by health facility staff, and staff shortages and supplies stockouts have not posed a major problem. However, four key issues contribute to limited access to institutional deliveries and caesarians despite the subsidy program: difficulties with travel from villages to first level facilities, poorly functioning communications and referral systems between first and higher level facilities, financial barriers to delivering in health facilities (deliveries are not free) and perceptions of low interpersonal quality of delivery care.

Challenges with user fee exemptions Providers find ways to compensate for lost revenue Costs may be passed on or shifted to other services to make up the difference Poorer quality, unofficial fees  patients may turn to private sector More stock-outs may mean consumers have to pay for drugs elsewhere Nonfinancial barriers remain (incl. transportation) Targeting is difficult Exempt everyone – rich benefit most? Exempt only the poor – how do you identify them? How to avoid stigmatization? “The more or less transitory problems having to do with quality of services (particularly shortages of medicines), excessive workload for health care workers, and patients turning to paid services when the free services are overloaded are not related to the abolition of fees as such. Rather, they are due to inadequate implementation; despite the laudable efforts of government, implementation has often been precipitous, the required resources poorly planned and not available, and follow-up lacking.” Morestin F & Ridde V (2009). The abolition of user fees for health services in Africa Lessons from the literature. Université de Montréal. http://www.help-ev.de/fileadmin/media/pdf/Downloads/Polic_Papers/Brief_Abolition_english.pdf

Insurance

Community-based health insurance Nonprofit schemes providing risk pooling to cover some portion of health care costs Often rooted in traditional solidarity mechanisms Usually emphasize participatory decision-making and management Membership is voluntary Community decides what services to cover Usually target the “informal sector,” those excluded from formal social protection systems West Africa – Senegal, Mali, Ghana, Benin, Guinea, Cameroon Eastern Africa – Rwanda, Ethiopia, Tanzania China

Community-based health insurance: What works? Can improve access to health care, especially services highly valued by community (like delivery care) Can improve financial protection for groups excluded from traditional insurance Can replace user fees, while maintaining fee revenue for health facilities Increased emergency obstetric care (EmOC) coverage? Inventory of schemes in West Africa (2003) found that 55% included coverage for C-section Delivery care (esp. referral care) is one of the most commonly covered services by CBHI schemes People can seek care when they need it, and tend to seek care earlier – avoid stock-outs, reduce informal fees

Community-based health insurance: What are the challenges? Low population coverage (with exception of Rwanda) – lots of pilots, not much scale-up Typical private insurance problems: small risk pools, adverse selection Management challenges – volunteer, unskilled staff Low revenue generation potential if all members are poor – often need subsidies to be sustainable Concept of insurance may be alien; people want “something” for their money Effective insurance requires real technical expertise

Community-based health insurance: Mali Positive evidence: Pregnant women who were scheme members were more likely to have at least 4 ANC visits (58%) than non-members (35%) More likely to receive malaria prophylaxis (79% vs. 60%) More likely to sleep under an insecticide-treated net (60% vs. 35%) – promoted by the scheme No evidence of increased skilled attendance rates In Mali, a process extending health insurance coverage has been envisioned, with components including workers in the formal and informal sectors as well as those who are financially unable to access health care. In collaboration with World Bank and the Ministerial Leadership Initiative (MLI)[1], Health Systems 20/20 has already supported the Government of Mali to develop a CBHI strategic plan and five-year workplan for the informal sector. Source: Franco L, Simpara C, Sidibe O, Kelley A et al. (2006). Equity Initiative in Mali: Evaluation of the Impact of Mutual Health Organizations on Utilization of High Impact Services in Bla and Sikasso Districts in Mali. Partners for Health Reformplus, Abt Associates Inc., Bethesda, MD.

National or social health insurance Pros: Can be comprehensive Universal insurance coverage with basic package of health services –including maternal services Can include coverage for normal and/or surgical delivery care Cons: Complicated Need functional tax collection systems, claims processing systems, effective/feasible provider payment mechanisms Politically challenging to implement Potential cost escalation – how to control? Some low-income countries are experimenting and/or implementing: Ghana, Rwanda, India, Nigeria … National vs. social -- different funding and service provision arrangements National health insurance: Funded through general tax revenues Government is the insurer, may directly provide services Social health insurance: Funded through payroll taxes (like Social Security) Separate social security agency(ies) are the insurers Contracts with public and private providers

National health insurance: Ghana 2005: Ghana rolled out the National Health Insurance Scheme (NHIS) Goal: Universal coverage for basic services Goal: Financial protection from health care costs No fees for maternal health care By 2008: 61% of population enrolled Wealthy much more likely to enroll than the poor Concerns about equity, cost escalation and financial sustainability 70% of the population is exempt from premiums Most funding comes from sales taxes (regressive) Goal: Universal coverage for basic services Funding: sales tax, payroll tax, registration fees and sliding scale premiums ($5-30/year) Top quintile almost 3 times as likely to enroll as poorest quintile 70% are exempt from premiums 53% of women who delivered in 2007 paid nothing

National health insurance: Ghana HS20/20 impact evaluation (2004-2007): Improved financial protection for maternal health care services OOP expenditures decreased for ANC, delivery care Insured women pay 1/6 of what uninsured pay Institutional delivery rates did not change (54.4% vs. 54.9%) WHY? Those most likely to enroll in health insurance were already more likely to deliver in a facility Poor quality of care in facilities Problems reimbursing facilities Non-financial barriers remain – distance, cultural factors Source: Sulzbach S, Chankova S, Hatt L et al. (2009). Evaluating the Effects of the National Health Insurance Act in Ghana: Final Report. Health Systems 20/20, Abt Associates Inc., Bethesda, MD.

National health insurance: Ghana But: recently some more positive signs – 2008: Pregnant women were exempted from NHIS premiums and registration fees 2010 evaluation (draft*): Preliminary signs that NHIS enrollment is beginning to increase rates of skilled birth attendance and institutional delivery. Conclusions? May just take time for measurable impacts to occur May need to specifically prioritize / emphasize / publicize MH benefits within the insurance program Design, provider payment, operations, quality – all matter. Also: Ghana National Development Planning Commission survey (nationally representative, 2008) found that 70% of deliveries in past 12 months took place in health facilities, compared with the MICS 2006 results (50% of deliveries). *Agar Brugiavini and Noemi Pace (2010 draft), Extending Health Insurance: Effects of the National Health Insurance Scheme in Ghana. Ca’ Forscari University of Venice Department of Economics.

Demand-side financing

Why demand-side financing? Traditional (supply-side) financing not very successful in increasing access of poorest women to quality care Input-based subsidies may go to the better off (leakage) The poor face more demand-side barriers – service costs, transport costs, distance from skilled providers, lack of knowledge or information about services Demand-side financing: Get the money (and services) directly to the people who need them. Supply side financing: (government subsidies are paid to providers)

Vouchers and Conditional Cash Transfers Vouchers: subsidies paid directly to a consumer – like a coupon Can subsidize a specific health care service (ANC visit), or related services or goods (drugs, transportation, food) Can target to specific populations Conditional cash transfers (CCTs): cash payments to individuals or households, contingent upon use of particular services Payment is made after the desired behavior is carried out – although service use may increase, access does not necessarily increase Can be from public or private source Entitles consumer to free or discounted service(s) from approved providers

Vouchers and CCTs: Bangladesh Pilot program – Vouchers for ANC, delivery care, emergency and postnatal care (PNC); cash incentive for delivery with qualified provider; transportation reimbursement Distributed to pregnant women by health field workers Combined with some supply-side incentives to providers 2009 evaluation* results: 45 percentage point higher skilled attendance rates in intervention vs. control areas Significantly higher rates of ANC, institutional deliveries, PNC No difference in C-sections Significantly lower OOP expenditures Laying the administrative groundwork for large-scale health insurance schemes (accreditation, quality assurance, claims processing) *Hatt, Laurel, Ha Nguyen, Nancy Sloan, Sara Miner, Obiko Magvanjav, Asha Sharma, Jamil Chowdhury, Rezwana Chowdhury, Dipika Paul, Mursaleena Islam, and Hong Wang. February 2010. Economic Evaluation of Demand-Side Financing (DSF) for Maternal Health in Bangladesh. Bethesda, MD: Review, Analysis and Assessment of Issues Related to Health Care Financing and Health Economics in Bangladesh, Abt Associates Inc.

Vouchers – Advantages Target specific groups or areas – get access directly to the people who need it most Demand creation – simply by distributing vouchers with information about services Can cover transport costs as well as service costs May improve quality and reduce costs – by making providers compete for voucher customers 29

Vouchers – Challenges May have high administrative costs Targeting can be difficult and costly Sudden increase in demand can overwhelm facilities Could skew service provision towards voucher services, away from other valued priorities Sustainability? (generally donor-financed thus far) 30

Conditional cash transfers – Advantages and Challenges Consumers can use the cash as they see fit – independence, poverty reduction Could result in overall improvement in welfare, not just health status Verification of conditions can be expensive, time-consuming Opportunities for corruption/fraud How do people use the money? Example: JSY in India Lancet article on JSY program in India –

Lessons learned

So what can financing interventions do to improve maternal health? Increase skilled attendance at delivery Provide access to EmOC Prevent delivery care and EmOC from causing catastrophic expenditures Reduce financial barriers to transportation

…and what can’t they do? Easily reach the poorest of the poor Erase problems with insufficient infrastructure and poor quality services Eradicate geographical and cultural barriers, which are often more intractable than financial barriers

Health systems strengthening is key Success of a financing scheme is not just based on the financing mechanism, but on all elements of health system functioning Accessible health facilities Human resources – staff, skills, motivation Quality of care Logistics, supplies, equipment, infrastructure Political will and leadership Cultural shifts / behavior change

Thank you! Laurel_Hatt@abtassoc.com Reports related to this presentation available at www.healthsystems2020.org